According to the operator/manufacturer, the flight was a demonstration for a component of the U.S. Army in a remote area on the grounds of Fort Benning, Georgia. The APT-70 is an unmanned aircraft with vertical take-off and landing (VTOL) capability. Takeoff and landing is conducted in a “tail-sitter” configuration and lifts off with four quad-rotor propellors providing powered lift. The aircraft transitions to forward flight using the propellors for thrust, and a bi-wing configuration for lift. During the flight, the Electronic Speed Controller (ESC) on the number 1 motor faulted, resulting in a loss of thrust from that motor. The aircraft flight controller automatically reduced thrust on the opposite motor to maintain stable attitude control, which caused an overall reduction in thrust and led to a descent and to impact with trees. The aircraft was substantially damaged and there were no injuries. The aircraft is capable of entering a hover and controlled descent in the event of a failed motor; however, this maneuver requires crew action. The impact with the trees occurred about 5 seconds after the failure, before the pilot could take action. The operator/manufacturer identified an ambiguous paragraph in their safety checklist regarding the appropriate response to ESC failure. The examination of flight data and the ESC by the operator/manufacturer identified a cracked ceramic capacitor in the ESC circuitry.